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An Alternative to Layoffs: The Shorter Workweek

Valerie Christopher, a network manager, is one of five employees at the Vera Institute of Justice in New York whose workweek was cut to three days.Credit
Marilynn K. Yee/The New York Times

WITH budgets pared and the overall economy continuing to contract, some employers have no choice but to cut payroll expenses. That almost inevitably means layoffs, but a few managers are trying an alternative: switching some people to 24-hour workweeks.

A case in point is the Vera Institute of Justice, a policy center based in New York, which recently cut the workweek of five out of 130 full-time employees to three days. This happened after one of the group’s major sources of financing, the JEHT Foundation, lost money investing through Bernard L. Madoff.

Valerie Christopher, 52, a network manager at the Vera Institute, is one of those now working a three-day week, which has resulted in a 40 percent reduction in her pay. She has enrolled in a New York program that allows employees to collect unemployment benefits to help make up for their reduced pay.

For an employee to qualify for the program, the employer must be reducing work hours by 20 to 60 percent and must not reduce benefits. The number of employers participating in the program increased to 462 last year from 291 in 2007.

Aside from the economic hardship, Ms. Christopher says the three-day week has been disorienting. “I haven’t hit a stride at all,” she said. “It’s hard to get used to the fact that you can’t always get to something tomorrow, because my workweek is Monday, Wednesday and Thursday.” Still, she says the three-day workweek, even with its quirky rhythms, is highly preferable to a layoff.

Ernest L. Duncan, chief operating officer of the Vera Institute, said the group chose three-day workweeks over layoffs to signal a commitment to its human capital. “Our business relies on people, and without them we don’t really have anything to offer,” Mr. Duncan says. “It was also shaped by an understanding there is going to be an upside to this downturn and we wanted to be better situated for the future when the economy does turn around and we need a full staff.”

Sigma, an advertising agency based in Oradell, N.J., has cut some of its employees to a 24-hour week, which they work over four shorter days.

The number of total hours worked, as opposed to the number of days, can be very important, says Patricia Paris, human resources manager at Sigma. “Working anything less than 32 hours means you are not eligible for benefits at our company,” she says. “So I work a four-day workweek, but would not want to go down to the hour equivalent of a three-day week” because she would no longer qualify for health insurance.

The 24-hour vs. 32-hour workweek is hardly a matter of splitting hairs — they are different work universes that mean flexibility for some and uncertainty for others.

Debbie Yorke, 46, a human resources specialist at Sigma, says the 24-hour workweek is ideal for her because she does not need health insurance (she receives it through her husband) and the schedule gives her more time to spend with her elementary-school-age daughters.

Alexandra Levit, a workplace expert and the author of “How’d You Score That Gig?”, said she had heard of other women who also gladly accepted the option of a three-day workweek as a way to stay employed while having more time at home with their children.

But for a one-income family, it can be a very different story.

Ms. Christopher, who is single and does not have children, says that while most of the five Vera employees are taking the three-day week in stride, a single mother is very concerned about supporting a family on such a reduced paycheck.

Elsewhere, Nancy Hoffman, a senior development associate at the House Ear Institute, an organization based in Los Angeles that advances hearing science, recently went from a four-day to a three-day workweek and is concerned about the loss of income.

“I thought I would help the budget in my department and take the 40 percent pay cut, but the reality of that pay cut is much worse than I imagined,” said Ms. Hoffman, who is divorced and has two grown children. “I’m digging into my retirement money.” The bright spot, she says, is that her benefits have not been cut.

Others may not be so lucky. And experts stress that the three-day week is far from a panacea.

Beth Shulman, a senior work and economy analyst for the Russell Sage Foundation, said: “There’s an equality to reducing hours rather than laying people off, but we have to deal with the issue that people can’t afford their expenses on a three-day-week income,” Ms. Shulman said. “It’s bad enough to lose wages, but in a lot of cases you are losing health care and pension coverage.”

CALI YOST, an expert on workplace flexibility strategies and the author of “Work + Life: Finding the Fit That’s Right for You,” says she believes that the layoff mentality will not be sustainable over the long term.

In addition to the moral questions about cutting pay and benefits, Ms. Yost says employers must consider their readiness for an upturn in the economy.

“If a steel company lays off employees and then suddenly gets money from the stimulus package and everyone is building bridges, they are going to be ill-prepared,” Ms. Yost said.

Kim S. Cameron, a professor at the Ross School of Business at the University of Michigan, found in doing research that the more that companies opt for flexibility in downsizing, the better they fare when the economy turns around.

“When firms can deliver the message that their employees are human resources, rather than human costs or liabilities, they see higher profitability, productivity, quality, customer satisfaction and employee loyalty over the long term,” Professor Cameron said.

A version of this article appears in print on , on page BU11 of the New York edition with the headline: An Alternative to Layoffs: The Shorter Workweek. Order Reprints|Today's Paper|Subscribe